4 F. Cas. 113 | D. Mass. | 1875
Two questions-have been argued: 1, Whether the neglect by a tradesman to keep proper books of account is good ground for setting aside his-discharge in bankruptcy after it has been granted; 2, Whether payment by a surety of the bankrupt, for his own purposes, to induce a creditor not to oppose the discharge, comes within the prohibition of the statute-as a payment by the bankrupt, or “in his; behalf.” Section 29 [14 Stat. 531]; Rev. St. § 5110.
1. This application is under section 34 [14 Stat. 533], Rev. St. § 5120, which empowers any creditor who desires to contest the validity of the discharge, on the ground that it was fraudulently obtained, to apply in writing to the court, setting forth which in particular of the several acts mentioned in section 29 he intends to give evidence of, and to prove such fraudulent acts, &c. By section 29 the discharge is not to be granted, or, if
2. The law of Massachusetts being that the discharge in bankruptcy of the principal ■debtor, duly pleaded, discharges a bond to dissolve an attachment, the surety, Mr. Tucker, found it for his interest to procure a discharge for the bankrupt. In doing this .he was obliged to satisfy those creditors who had made opposition. It is clear that ■this was the motive of his action, and that at was taken without consultation with the bankrupt, without regard to his interests, and with no promise, expectation, or probability of ever receiving from him any indemnity of any sort. The original objectors may have brought themselves within section 35 [14 Stat. 534], Rev. St. § 5131, which enacts, that if a creditor shall obtain any sum of money, &c., from any person, as an inducement for forbearing to oppose, &c., they shall forfeit double the amount, &c. But the bankrupt ought not to be deprived of his discharge by a payment made in the way and with the motive proved here. By section 29 the payment must be made by the bankrupt, or in his behalf. Now, I do not intend to say that payment by a friend, actually made in behalf of the debtor, with his knowledge, is not prohibited, nor that very slight evidence would not affect him with participation; but one made behind his back, and for the very purpose, perhaps, of vitiating his discharge, should not have that effect. Such a payment would be a fraud on the bankrupt. This payment was made by the surety in his own behalf. He was under no obligation to treat all attaching creditors alike, nor to take or abstain from any course of action that might serve his own interests. Under the English statute above referred to, it was held that a payment by any one to induce a creditor to sign the certificate, would avoid it. And it may be that an assent of one creditor, so procured, would, under our law, vitiate the discharge, if the action of that creditor had, or might have had, an influence on the others. But that would be on the ground of fraud on those who were so influenced. Lord Eldon twice expressed regret that the law, in his time, had been settled as it was: “It is very hard, but it is settled, that, if a friend or foe of the bankrupt gives money, though the bankrupt was in no degree privy to that transaction, and never would have consented to it, the certificate is void” (Ex parte Hall, 17 Ves. 62); and on another occasion: “I feel it very difficult, upon attention to any principle that has furnished this rule, to support the doctrine that a bankrupt is not to have his certificate, if, though he would abhor such means of procuring it, some too active friend has advanced a sum of money to obtain it” (Ex parte Butt, 10 Ves. 360).
It is entirely clear that Tucker acted neither as a friend nor an enemy of the bankrupt, but simply for his own sake; and not only because our law has a phrase which the English law did not have, namely, that the payment is to be “in behalf” of the bankrupt, but on the ground of justice and fair dealing, which the learned lord chancellor alludes to, I am of opinion that a payment of this sort, distinctly and unequivocally proved not to have been made with the bankrupt’s assent, or with any regard to his rights or interests, ought not to avoid his discharge. I look upon this as an exceptional case. If the creditor who was bought by the surety had signed the assent, so that others might be misled; or if the vote of creditors were necessary, and he had joined in it, as in cases of composition; it would be no answer to say that the debtor was innocent; for the rights of others would have been prejudiced, and by illegitimate means. This decision will, therefore, hardly make a precedent for any that is likely to arise after it. One of the allegations of the petition is that the payment